Lean Thinking: Meaning, principles, tools and results

What is Lean Thinking?

Lean Thinking is a management style that aims at eliminating waste in order to create excellent standardised processes at low cost with the contribution of people. It is adaptable to all sectors and contexts and applies to all business areas.
Customer focus is the basis of the Lean Thinking philosophy: it is attentive and focused on customer needs, it is obsessive waste avoidance (MUDA) and empowerment of company resources to create added value and it is continuous improvement.
Lean Thinking encompasses a set of operational tools and methods for applying Lean principles in the company; however, the Lean Thinking approach must be interpreted as an opportunity for radical change that affects not only the operational aspect but also the set of rules and values, the corporate culture.

Origins of Lean Thinking

Lean Thinking originated as a conceptualisation of a proven management system with excellent results: the Toyota Production System (TPS).

Its origins lie in manufacturing but today it is successfully applied to all operational processes: product design and development, logistics and administration.

Between 1800 and 1910, the production system was organised according to the typical logic of handicrafts: characterised by low production volumes, a high variety of one-off products, a low division of labour and coordination, and the absence of any form of automation.

Between 1910 and 1950, a new form of capitalism emerged as a result of the concentration of industrial and financial capital in large companies, meeting the need for large investments in machinery and plant.

In these large industrial enterprises, mass and large-scale production known as Fordism began to spread. Henry Ford was inspired by the theories of Frederick Taylor, the application of the principles of the “scientific organisation of labour”, of a very strong division of labour based on the analysis of time and methods and a strong recourse to automation, and introduced the assembly line for the production of the Ford T-model, thus achieving a highly standardised mass production with a considerable reduction in production time. Mass production is characterised by strong vertical integration and centralisation of decisions and an orientation towards the production of high quantities with a high standardisation level: the focus is not on the flow of material or product but on the production of the largest possible quantity. The disconnection of production processes causes stocks of semi-finished products to grow considerably. Production is not planned based on market demand, and finished products are pushed through the sales network anyway (push production).

The model developed by Ford was the inspiration for the production system adopted by Toyota in the 1940s, which refined it to meet the need for production flexibility and lower infrastructure availability.

Under the leadership of chief engineer Taichii Ohono, Toyota developed the TPS (Toyota Production System), a production system guided by the principles of waste avoidance and continuous improvement, characterised by limited and flexible automation, multi-functionality of operators and network integration.

The term “lean” became popular in 1990 thanks to the book “The Machine That Changed the World” by Womack Jones e Roos. EThey clearly illustrated, for the first time, the significant differences between the Western production system and the TPS. They defined the key elements that enabled superior performance as lean production or lean manufacturing, “lean” because the Japanese production system allowed them to use less of everything - less human effort, less capital investment, less facilities, less inventory and time - in production, product development, supply and sales.

The basic concepts of Lean Thinking

Underlying Lean Thinking are fundamental concepts that revolutionise the culture and way of operating within the company:

Customer focus. The centrality of the customer is the starting and finishing point of all the activities and actions implemented by the company in transferring, through its products and services, the value that the customer expects. The customer is not only the end customer, the “internal” customer is equally important. The flow of information starts from the customer and goes all the way to research and development: dialogue with the customer is essential to identify needs and define value.
The contribution of people. “Knowing how to do business”, or knowing how to do things well (the Monozukuri Japanese concept), is only possible starting with the ability to manage people (Hitozukuri): the development and support of the company's competitiveness, with the achievement of significant and lasting results, is only possible with the continuous and constant alignment of the management and all the people working in the company towards a common goal.
Fighting waste. MUDA is the Japanese term that can be translated as waste. MUDAs consist of all activities, which commit resources and energy, that do not add value to the product or service and therefore do not provide value to the customer. Recognising waste is fundamental to the application of Lean Thinking.
Continuous improvement. KAIZEN in Japanese means continuous improvement: no process is perfect but can always be improved. All company personnel, top management, managers, down to operators, must participate in the improvement process by sharing common and defined objectives.

The key principles of Lean Thinking

In their book “Lean Thinking”, Womack and Jones identified the five key principles that must be embraced by a company in order to adopt Lean Thinking:

Value. Rethinking value from the customer's point of view. Only a small part of the total actions and time that are spent producing or providing a service add real value for the end customer. It is therefore crucial to clearly define the value of a specific product or service from the customer's perspective, so that a step-by-step removal of all non-value activities or MUDA can be carried out.
Mapping. Mapping the value stream and identifying waste.
Flow. Create a flow to reduce lead time. Work management is not done through successive departments, processes are reorganised so that the flow of products or activities flows seamlessly through the various stages of value addition, using the lean set of tools and techniques to remove all obstacles from the flow. The removal of wasted time and energy is a great opportunity for improvement in the qualitative and quantitative efficiency of a company, allowing attention and efforts to be focused on value creation.
Pull. Make the customer pull production: ensure that production and supply are co-ordinated with market demands.
Perfection. Continuous improvement. Creating a flow and making the customer pull production also starts with a radical reorganisation of processes, but the results become truly significant when all steps are linked together.

The principles of Lean Thinking applied to different sectors

Lean Thinking can be applied to any organisation in any sector. Although its origins lie in the automotive industry, the principles and techniques of Lean Thinking are now transferred to many sectors, often requiring only a small adaptation based on specific needs and activities.
Sectors such as retail, large-scale distribution, healthcare, construction, financial services and public administration have successfully adopted the Lean Thinking principles.

The application of Lean Thinking affects not only internal company processes but extends to supply, production and distribution activities: the company can think of itself as part of a larger supply chain, extending its strategy beyond its own boundaries and sharing common improvement goals with its stakeholders.

Implementing Lean Thinking: Tools and methodologies

Lean Thinking is supported by many tools and techniques that enable companies to apply its principles to implement change. We can subdivide these operational tools based on the Lean Thinking principle they help to implement:

VOC (Voice Of Customer): To rethink value from the customer's point of view (Value principle)
VSM (Value Stream Map),Swim Lane, Spaghetti Chart, Cross Analysis and Service Level, PRO.ACT.A. (Process and Activity Analysis), Work
Sampling and OEE: To map the value stream and identify waste (Map principle)
5S and SMED: To create a flow and reduce lead times and waits (FLOW principle)
Kanban, Supermarket: To synchronise the delivery of products and services with customer demands (Pull principle)
Kaizen, Skill Matrix, Visual Management: for continuous improvement (Perfection principle)

Applying Lean Thinking: practical tips

Think of the human factor
In order to produce a radical change in the company's performance, Lean Thinking must involve people, the way of thinking, the company culture and cannot be limited to activities and processes. Doing things well and make people grow (Monozuri and Hitozuri) are both indispensable for achieving lean goals.

A lean company must therefore involve and raise the awareness of all company personnel, motivating them to achieve common goals.

Problem solving oriented
In order to be able to find the correct solution to problems, it is necessary to have a thorough understanding of the current situation, and the best way to understand what is really happening is to observe it for yourself. Continuous improvement will thus consist of a series of positive transformations adopted directly at the place where the problem was identified.

Don't be afraid to try
One often worries about doing things that may have uncertain outcomes. Sometimes this insecurity can lead to discussing and hesitating for too long and thus postponing the implementation phase. Start your journey, take the first step: observe and analyse, experiment and collect data, learn and improve the process.

Get measurable results
Eliminate obvious waste now and communicate and share the improvement achieved, which can then be immediately appreciated and verified even by those who are more resistant to change.

Thoroughly understand the principles and techniques for applying Lean Thinking
Understanding the theory and tools of Lean Thinking are a prerequisite for leading the company towards lean change. It is also paramount to make all staff aware and involved in the project. Lean consultancy services provide expert figures who accompany the company towards continuous improvement. They help to fully understand the principles of Lean Thinking and to guide and motivate company staff

Results of the application of Lean Thinking

Companies that embark on a lean transformation journey, adopting Lean Thinking principles and methodologies, achieve results in terms of qualitative and quantitative efficiency and effectiveness that are difficult to achieve with other approaches. Typical results of applying Lean Thinking in business are:

Shorter lead time:

Increased flexibility and availability of product/service in less time, increased productivity

Less semi-finished products:

(work in progress) and stocks

Increased quality of products and processes

through a process of refinement, continuous improvement
Reduced product costs: greater efficiency

Greater competitiveness:

Eliminating waste in terms of time and resources spent on non-value activities frees up resources to be reinvested in the present and future to increase the value of the product/service and generate more profits

Staff development and motivational enhancement

Change in the product or service:

Focus on customer satisfaction and increased perceived value but also increased quality, efficiency and flexibility.